Robert S. Kapito

About Robert S. Kapito

Robert S. Kapito is President of BlackRock and a member of the Board of Directors. He co‑founded BlackRock in 1988, has served as President since 2007, and oversees day‑to‑day operations across Investment Strategies, Client Businesses, Technology & Operations, and Risk & Quantitative Analysis. He is 68 years old and has served on BlackRock’s Board for 18 years (director since 2006) . In 2024, BlackRock delivered record net inflows ($641B), revenue growth of 14%, operating income (as adjusted) up 23%, EPS (as adjusted) up 15%, and expanded operating margin (as adjusted) by 280 bps to 44.5%—driving a 29% TSR for 2024 and 131% five‑year TSR through year‑end 2024 .

Past Roles

External Roles

Fixed Compensation

Performance Compensation

• Compensation framework and weighting: Annual incentive assessments weight Financial Performance 50%, Business Strength 25%, and Organizational Strength 25% . Over 90% of regular annual NEO compensation is performance‑based and “at risk” .
• Award vehicles and vesting mechanics:
  • Annual Cash Bonus (paid currently) and Deferred Equity Bonus in RSUs (generally vest 1/3 on each of the first three anniversaries; dividend equivalents paid on vest) .
  • BPIP performance RSUs (3‑year performance; metrics are average annual Organic Revenue Growth and Operating Margin, as adjusted; payout 0–165% of target) .
  • No performance stock options granted to the CEO or President in 2017/2023 option programs; those were targeted to other leaders .

BPIP metrics and rigor:

• 2024 BPIP Matrix (performance period 2025–2027): payout linked to 3‑yr average Organic Revenue Growth and Operating Margin, as adjusted; Max payout = 165% at ≥$1.0B Organic Revenue Growth and ≥46.5% margin .
• Realized performance example: The 2021 BPIP (performance 2022–2024) paid at 43.0% of target given below‑target growth and 43.0% margin .

Equity Ownership & Alignment

• Beneficial ownership (03/28/2025): 211,431 common shares directly; plus 9,032 deferred/restricted stock units or stock options vesting within 60 days; <1% of outstanding shares . Stock ownership guidelines apply to GEC members; as of 12/31/2024 all NEOs exceeded the guidelines .
• Hedging/pledging: Company policy prohibits pledging BlackRock securities as collateral, holding in margin accounts, and hedging transactions for all employees, officers, and directors .
• 2024 vesting/realization:
  • Options exercised: 0 shares .
  • Shares acquired on vesting: 15,815 shares; value realized on vesting $12,363,060 .

Outstanding/Unvested Equity Detail (12/31/2024):

Vesting schedules:

• Deferred Equity RSUs: One‑third vests on each of the first three anniversaries after year of grant, starting January 31 following the grant year (e.g., 2024 grants vest beginning 1/31/2025) .
• BPIP awards: Eligible to vest after three‑year performance period with payout per the matrix; 2024 BPIP covers 1/1/2025–12/31/2027 .

Employment Terms

• Employment agreements: BlackRock has no ongoing employment, severance, or change‑in‑control agreements with NEOs; standard severance plan applies .
• Severance plan: Lump sum equal to two weeks of salary per year of service (min 12 weeks, max 54 weeks) for eligible U.S. employees terminated without cause in conjunction with RIF/position elimination .
• CIC/vesting treatment: No single‑trigger vesting; equity generally requires termination within 12 months of a CIC for vesting acceleration (double‑trigger), with RSUs and BPIP treated per plan terms .
• Restrictive covenants and clawbacks: Dodd‑Frank‑compliant clawback plus broader standing clawback (fraud/willful misconduct), and forfeiture upon restrictive covenant breaches (e.g., competition, non‑solicit), with explicit anti‑hedging/pledging policy .

Potential Payments (assumes termination 12/31/2024; stock at $1,025.11):

Leadership Retention Carry Plan note: If participating funds had been fully liquidated as of 12/31/2024 upon a qualifying termination, an additional estimated $25.3 million would have been payable; actual value depends on future fund performance and timing .

Board Governance

• Board service and independence: Director since 2006; 18‑year tenure; as an executive officer (President), he is not an independent director .
• Committee memberships: None (for Kapito) .
• Board leadership and independence safeguards: The Chairman and CEO roles are combined (Laurence D. Fink), with a Lead Independent Director (Murry S. Gerber) providing independent leadership and executive sessions of independent directors; 15 of 18 nominees are independent .
• Board activity: 2024 committee meetings—Audit 15; MDCC 8; NGC 6; Risk 6; Executive 3 .

Dual‑role implications: Kapito’s combined executive/Director role entails non‑independence; BlackRock addresses independence concerns through a high proportion of independent directors, a designated Lead Independent Director, and regular executive sessions .

Director Compensation (as applicable)

The proxy’s “2024 Director Compensation” section was updated; however, Kapito is an executive officer and his compensation is reported under Executive Compensation. The proxy does not indicate separate director retainers paid to him as an employee‑director .

Performance & Track Record

• Operating performance context (2024): Record net inflows $641B; revenue +14%; operating income (as adjusted) +23%; EPS (as adjusted) +15%; operating margin (as adjusted) 44.5% (+280 bps) .
• Shareholder returns: 2024 TSR 29%; five‑year TSR 131% .
• Business execution (Kapito scorecard highlights): Led client distribution and operating management, contributing to 6% organic asset growth, 4% organic base fee growth, ~$1.2B performance fees, and margin expansion; overall assessment “Far Exceeds” .

Compensation & Incentives: Structure Analysis

• Mix and year‑over‑year change: 2024 Total Annual Compensation $25.05M (+24% vs 2023), reflecting outsized firm performance and strategic execution .
• At‑risk emphasis and rigor: >90% at risk; BPIP tied to multi‑year, shareholder‑aligned metrics with capped maximum and realized sub‑target outcomes (e.g., 2021 BPIP at 43% of target), evidencing rigor .
• No option re‑pricings; no single‑trigger CIC vesting; no tax gross‑ups for 280G; meaningful ownership guidelines; anti‑hedging/pledging policy .
• Insider selling pressure: Early‑year scheduled RSU vestings (e.g., 15,815 shares vested in 2024) can create periodic sell‑to‑cover activity for tax but Kapito reported no option exercises in 2024 .

Equity Ownership & Alignment Policies

• Ownership status: Kapito beneficially owns 211,431 common shares; <1% of outstanding; plus 9,032 deferred/option shares exercisable within 60 days .
• Guidelines and compliance: All NEOs exceeded stock ownership guidelines as of year‑end 2024 .
• Hedging/pledging/shorting: Prohibited under BlackRock’s insider trading policy .

Employment & Contracts

• No individual employment agreement; severance via standard plan; garden‑variety restrictive covenants apply (confidentiality, non‑solicit); equity forfeiture/recoupment on breaches; robust Dodd‑Frank and standing clawbacks .

Compensation Peer Group (Benchmarking)

• 2024 peer group refreshed to reflect BlackRock’s broader scale and private markets emphasis: retained independent/captive asset managers (e.g., Goldman Sachs, Morgan Stanley, State Street), added alternative managers (Apollo, Blackstone, KKR), and included major financial technology and custody firms; several firms were removed as no longer appropriate peers .

Say‑on‑Pay & Shareholder Feedback

• Advisory vote on NEO compensation included as Item 2 in 2025 proxy; enhanced disclosure provided and ongoing shareholder engagement described (including MDCC Chair participation) .
• The proxy references a “2024 Say‑on‑Pay Response” section, reflecting responsiveness to investor feedback .

Risk Indicators & Red Flags

• Positive governance practices: No single‑trigger CIC; no option repricing; robust clawbacks; anti‑hedging/pledging; strong ownership guidelines .
• Perquisite optics: Mandatory private aircraft usage and security costs for Kapito due to safety assessments (Board‑mandated); disclosed incremental costs .
• Potential payout optics: Large BPIP‑driven potential termination values are performance‑contingent; Leadership Retention Carry Plan value depends on long‑dated fund outcomes .

Investment Implications

• Pay‑for‑performance alignment is strong: >90% at‑risk pay; multi‑year BPIP tied to Organic Revenue Growth and Operating Margin, as adjusted; realized BPIP outcomes below target demonstrate rigor .
• Low pledging/hedging risk and strong ownership alignment: Prohibitions in place and guidelines exceeded; beneficial ownership meaningful though <1% of shares outstanding .
• Limited contractual leakage: No evergreen employment contracts or tax gross‑ups; double‑trigger equity vesting on CIC; severance per broad‑based plan .
• Retention: Compensation growth (+24% YoY TAC) and long‑dated performance equity (and carry programs for broader leadership, though not for President) support retention; no sign of near‑term insider option‑driven selling pressure (0 options exercised in 2024) .
• Governance mitigants around executive directorship: Non‑independent director status offset by strong Lead Independent Director role and high independent board composition .